I’ve always said, there is a difference between pre-retirement investing and post retirement investing. As a result, retirees need to re-evaluate their investment portfolios the closer they get to retirement. I suggest that people who are three to 5 years from retirement need to get serious about it and start making sure their portfolios are positioned so there are in control over their retirement date.

If you don’t agree, here are some stories about real people that might get you thinking:

As reported in the Globe an Mail, Ron, age 74, in BC saw his life take a turn to the dark side when the stock market collapsed in 2008. With no pension, this former chartered accountant and high-level finance executive relied on his retirement savings. Not only did he feel he was ‘losing control of his money’ but he also felt he was losing control of his life. Although well respected in social circles, Ron started to feel anxiety and depression to the point where he could not leave the house. Do you know people who retirees who were really impacted by market corrections in the past 10 years? Not only does it affect their finances but it affects their life and happiness and health.

Sharon, from Edmonton, was a nurse for 28 years. At 61, she was getting ready for retirement when the stock market took 35% of her RRSPs. Although she had a pension through work, the psychological affects of losing $40,000 overnight crippled her enthusiasm for what was supposed to be the Golden years. She decided to delay retirement for a couple of years despite having very little enjoyment with her job. Delaying retirement was not good for her, nor her employee. Do you know people who delayed retirement because of the stock market or mutual funds?

Tim from Grande Prairie, was excited to retire. Begin financially responsible he retired with a significant nest-egg of $750,000 at the age of 57. When he retired, he was excited to hear that a financial advisor could invest his money and pay him 8% per year using a combination of income trusts, dividends and income paying mutual funds. The distributions would pay him just under $60,000 per year and although it was not promised, the goal would also be to preserve the $750,000. Unfortunately for Tim, the markets took a turn for the worse, new tax rules hurt the income trust market and not only was Tim’s income cut back from $60,000 per year to $40,000 per year but his $750,000 took a massive hit of $150,000 and now was only worth $600,000. Tim, not only went back to work but also made major changes to his lifestyle. He still has a bad taste in his mouth and wonders how retirement can be called the “GOLDEN” years. Do you know people who retired but went back to work because of the stock markets or mutual funds?

Todd and Lenore, happily retired at the age of 60 in early 1999 at the height of the markets. For the first years, they enjoyed what was supposed to be the best years of their life with a couple of holidays financed through Lenore’s RRSPs. Todd had a pension which was sufficient to cover their basic monthly expenses. They each had CPP which gave them a bit of a financial cushion and their plan was to use the RRSPs to enjoy the golden years with some travelling and to cover some of their hobbies like Golf and Tennis. Unfortunately, for Todd and Lenore, the bursting of the stock market bubble in 2000 cut their RRSP savings by 25%. Their instinct was simply to cut their travel until the stock market recovered. The problem was over the course of the next 10 years, the stock market recovered but then took another major hit. In 2009, Todd was diagnosed with Cancer and would lose the future opportunity to make up the time lost to travel. Do you know people who cut back on their lifestyle in the Golden years because of the stock market and the fear of running out of money too quickly?

The bottom line is there is a difference between investing for retirement and investing in retirement. Retirees who recognize this fact and make adjustments prior to retirement need have the opportunity to take control of their portfolios and their retirement.

Other related investing

Investing in retirement is different than investing for retirement (MapleMoney)

Be aware of the retirement risk zone

Surviving the retirement risk zone with guaranteed income products

Conservative investing is an abused term

Markets hit retirees the hardest

Retirees should be more conservative with their portfolios